Question on LLC member distributions w/o closing books

[Alice Lee]

If nothing is to be paid out, there is no entry.  If you are actually going
to pay dividends, set up an account under equity called Dividends for the
debit.  That will offset equity and should only happen when you have the
retained earnings from which to pay dividends.

-----Original Message-----
From: gnucash-user
[mailto:gnucash-user-bounces+alee212007=satx.rr.com at gnucash.org] On Behalf
Of Matt Kowske
Sent: Monday, February 23, 2015 8:31 AM
To: Wm; gnucash-user at gnucash.org
Subject: Re: Question on LLC member distributions w/o closing books


On 02/22/2015 10:32 AM, Wm wrote:
>
> If the distribution is "on paper only" then you use a Liability 
> (upside down Asset) account to recognise the amounts the LLC owes but 
> hasn't distributed.  Does that solve the bank account problem?
>
> The point is Equity / Capital is balance sheet only so you can't (or
> shouldn't) use Income and Expense accounts for this sort of transaction.

So if I create a liability for the LLC of "Unpaid distributions" I can
credit this account to represent money not yet paid out to members from net
profits. The problem still is, where does the corresponding debit come from?
I can take it from owner's equity but that decreases their equity in the LLC
and that is not what is happening. Conceptually, equity should increase from
retained earnings and then decrease as profits are paid out.

I think Buddha Buck is hitting the crux of what I'm having trouble with so
I'll continue over there...

_______________________________________________
gnucash-user mailing list
gnucash-user at gnucash.org
https://lists.gnucash.org/mailman/listinfo/gnucash-user
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.